MZI Resources (ASX:MZI) has made a significant step in the ramp-up of its newly producing Keysbrook mineral sands operation in Western Australia by bringing the process plant to nameplate capacity less than a month after the start of commissioning.
This milestone keeps the company on track to achieve first sales in December 2015.
It also allows the wet concentrator plant's contractor GR Engineering Services to demobilise form the site, effectively putting the plant under the control of MZI's Keysbrook operations team.
Commissioning of the custom-built processing annexe at Keysbrook's separation plant is continuing, with heavy mineral concentrate now being fed through the mill on a full-time basis.
Production of the company's first saleable leucoxene and zircon products was achieved last month on a trial basis, allowing for customer sales plans to be accelerated from an early-2016 start to December 2015.
Keysbrook is designed to produce approximately 96,000 dry tonnes of leucoxene products and zircon concentrate annually.
A leucoxene giant
The start of production at Keysbrook puts MZI on the cusp of becoming the world's biggest primary producer of leucoxene, as well as a substantial producer of zircon.
What makes Keysbrook so compelling is that it is a high-margin long-life project with strong growth potential.
Global resources total 155 million tonnes while reserves stand at 26 million tonnes, which equates to more than 30 years of life at currently planned production rates, yet there is still significant upside to expanding its resources
The project's low forecast operating costs and high-value product mix also promise to make MZI one of the highest-margin suppliers of premium mineral sands products to the global market.
This is thanks partly to the fact that mining will be in free dig sand with an average depth of 2.2 metres and no strip ratio. The material is low in slimes and considered easily processed.
Testwork, however, has confirmed the potential to further increase heavy mineral recoveries.
Financial metrics are impressive as well, with first full-year EBITDA forecast at $39.9 million.
Reaching the nameplate capacity milestone at Keysbrook's wet concentrator less than a month after commissioning started is a major step toward bringing Keysbrook to full commercial production.
The quick ramp-up of the project's west concentrator and the earlier-than-expected production from its separation plant have together represented strong recent demonstrations of MZI's excellent record for meeting key milestones on time and on budget.
Such systematic and efficient development progress bodes well for the practical rollout of Keysbrook's attractive long-term ambitions, which include plans to become the world's biggest primary producer of leucoxene
MZI is now well on track to complete its ramp-up to full production during December, when first sales are also expected to be achieved.
These future milestones represent further potential price catalysts for MZI stock, which was strongly supported last month when the company's major shareholder Resource Capital Fund committed to acquire shares to the amount of A$20.6 million in a placement.
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